Key Issues in Seawater Desalination in California: Costs and Financing

Economics – including both the cost of the water produced and the complex financial arrangements needed to develop a project – are key factors that will determine the ultimate success and extent of desalination in California. New research from the Pacific Institute, Key Issues for Seawater Desalination in California: Cost and Financing,assesses desalination costs, financing, and risks associated with desalination projects. The Pacific Institute analysis finds that the cost to produce water from a desalination plant is high but subject to significant variability, with recent estimates for plants proposed in the state ranging from $1,900 to more than $3,000 per acre-foot.“Seawater desalination remains among the most expensive water-supply options available, although the public and decision-makers must exercise caution when comparing costs among different projects,” said Heather Cooley, co-director of the Pacific Institute Water Program and lead author of the report. “In some cases, costs are reported in ways that are not directly comparable. For example, some report the cost of the desalination plant alone, while others include the cost for additional infrastructure needed to integrate the desalination plant into the rest of the water system. Some estimates include costs to finance the project, while others don’t. Even when there is an apples-to-apples comparison, there are a number of site- and project-specific factors that make cost comparisons difficult, such as energy, land, and labor costs and the availability of visible and hidden subsidies.”

Key Issues for Seawater Desalination in California: Cost and Financing is part of a series of research reports in progress that identify key outstanding issues that must be addressed before additional proposals for new seawater desalination in California are approved. Other issues addressed include the environmental impacts of seawater desalination, the cost and financing of proposed projects, and energy requirements and their greenhouse gas implications.

Our analyses seek to provide communities and decision makers with information needed to make decisions about building desalination plants and to create a more rational and sustainable policy around seawater desalination along the California coast, and elsewhere.